Uganda – oil, corruption and inequality

At Forest Mall, errand boys and girls for Kampala’s wealthy families dash back and forth. The Mall is part of a string of new developments providing office space for banks, coffee shops and expensive boutiques. A cashmere sweater at one of these upscale hangouts costs 1.2 million Ugandan shillings – rather more than the starting salary of a university graduate at one of the banks here. There are signs of affluence everywhere.
And signs of trouble too.
The acquired tastes of Uganda’s better-off classes contrast badly with its downtrodden masses. Recently, the government here has put its faith (and invited others to do the same) in newly discovered oil and gas reserves in the western part of the country. It is these future funds that are the promissory notes used by politicians, led by President Yoweri Museveni, to suggest a brighter future is nigh. An ambitious Vision 2040 was recently published by the National Planning Authority with promises of investment in highways, education institutions and new energy projects. On its glossy cover was a picture of a rocket, perhaps delivering the first Ugandan to the moon. The wet dreams of the government and the political class around oil resources are part of the disappointing story that underpins the rising tide of inequality in Uganda.
In Uganda, there is not one single public works project that has ever been finished on time or within budget. This is because a large part of the money paying for the country’s cashmere exhibitionists and hedonists is ‘borrowed’ from the taxpayer. Corruption around public works is a billion dollar industry. According to reviews of government business, between 500-950 billion shillings is lost in procurement0-related malfeasance. Transparency International (an NGO that monitors and publicizes corporate and political corruption in international development) announced last month that Uganda was the most corrupt country in Eastern Africa. This illegal market is one cornered by politicians and civil servants.
Unsurprisingly, there is a debate on what this all means for public policy – especially since new wealth is possible with natural resources like oil. But it’s more than that. The underbelly of corruption in Uganda is not simply that it is tied to the politics of patronage, but rather that it is dependant on it. Corruption is not simply the great procrastinator of effective public policy (to which we will get shortly), nor is it simply simply abetted by the opportunities presented by official bureaucracy. The uptick of Ugandan corruption reflects the fears of the political class over the coming political transition, which heralds an uncertain period that may include change in the patronage networks. It is consequently not driven just by greed, but also by fear.
This is the real context of discussions over whether Uganda’s oil will be a blessing or a curse. By my calculations, if political transition from Museveni is placed on a timeline, it coincides almost exactly with Uganda’s transition to oil producer. Those within the oil sector predict the first commercial production will happen around 2017 or even 2020. By then Uganda will have a new President. Read more…